Mudajaya bags RM220 mil Rapid job

Mudajaya Group Bhd
(Dec 23, RM1.14)
Maintain neutral with a target price (TP) of RM1: Mudajaya Group Bhd bagged another project from Refinery and Petrochemical Integrated Development (Rapid) for RM220 million from Petroliam Nasional Bhd (Petronas).

This is the group’s second major job secured from Rapid this year, with the first one secured back in September for RM489.4 million.

Assuming a profit before tax of 8%, the new contract is estimated to yield a net profit of about RM13 million during the construction period. This is within our job replenishment expectations and hence our earnings estimates are kept unchanged.

We maintain “neutral” and the TP at RM1, pegged at 50% of its net tangible assets.

The new job scope, among other things, includes building the utilities, interconnecting and off-site facilities that encompass engineering, procurement, construction and commissioning of warehouses and workshops for the Rapid project in Pengerang, Johor.

The contract was awarded by PRPC Utilities and Facilities Sdn Bhd, a subsidiary under the Petronas group.

The targeted completion date is January 2018, i.e. a construction period of 25 months from the date of the contract.

With the new job in the bag, the group has secured contracts worth RM709 million from Rapid this year, which boosted its outstanding order book to more than RM1.4 billion.

Other jobs eyed going forward include jobs from the power industry (e.g. Tracks 3B and 4A) worth about RM1.5 billion and highways such as the Damansara-Shah Alam Elevated Expressway and Sungai Besi-Ulu Kelang Elevated Expressway.